New Delhi: A senior executive of an Indian company spent half a million Singapore dollars on his partner, and then wanted it all back when a break-up happened about a year into the relationship.
In a judgment on financial disputes arising from an intimate relationship, the Singapore High Court has held that the sums advanced by the claimant to his former romantic partner were gifts, not loans. In a 9 September order, the court explained that intention governs: once a donor parts with property as a gift, he or she cannot later resile from that position and convert it into a loan.
Justice Lee Seiu Kin was asked to decide whether nearly half a million Singapore dollars spent by the claimant on his former partner were loans repayable to him or gifts given out of affection. The judge rejected the claims on unjust enrichment, stating that the sums were voluntarily conferred and no shared understanding of repayment existed between the parties.
The regulations involved were contract law, tort (misrepresentation under the Misrepresentation Act), and equity (claims in unjust enrichment and constructive trust).
Background
The claimant is the Chief Executive Officer (CEO) of a publicly listed Indian company and the defendant a former flight attendant who later worked in sales. They met in 2019, began a romantic relationship in September 2022 and broke up in December 2023 after suspicions of infidelity were raised by the claimant.
During their relationship, the claimant spent lavishly on her personal expenses through his credit cards, paying life insurance premium, settling debts owed to a previous employer, funding Feng Shui consultations for her home, sponsoring international trips, incorporating her fashion design company, and paying fees for a Stanford-based education programme.
In total, he claimed half a million Singapore dollars spent, or $468,090 as interest free loans. To substantiate this, he relied on a handwritten note allegedly signed by the defendant which he argued evidenced her acknowledgment of the sums as deposits to be returned.
He further alleged two distinct misrepresentations: first, that she represented their relationship as genuine and exclusive (“relationship representation”) and second, that she assured him of repayment from her funds (“repayment representation”).
On this basis, the claimant contended that the disputed sums were not mere gifts but enforceable loans. He, therefore, sought repayment not only under contractual principles but also invoked equitable doctrines, arguing that she should be made liable under the law of unjust enrichment or, alternatively, subjected to the doctrine of institutional constructive trust, so that the court could compel restitution of the amounts she had benefited from.
The defendant rejected these claims, insisting the sums were gifts given out of love and affection, not as loans. She rejected the authenticity of the handwritten agreement and denied making any misrepresentation. She also argued that the transfers were made voluntarily in the context of a romantic relationship, without any underlying contractual or legal expectation of repayment.
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The legal angle
The case raised the legal issues: whether the sums were gifts or loans; whether the handwritten agreement evidenced loans; whether misrepresentation was established; whether unjust enrichment applied; and whether a constructive trust could be imposed.
The court began with the settled principle that contracts require intention to create legal relations. “A valid gift inter vivos (between the living) is made where there is an intention to gift and delivery of the precise subject matter of the gift. The court assesses the subjective intention of the donor at the time of the transfer,” it said.
The court emphasised that once a gift is made, it cannot be retroactively converted into a loan and that once there is a gift, the donor parts fully with the property and having no title to the property, it cannot be then converted into a loan.
It noted that a gift cannot be revoked unless some ground for setting aside the transfer can be found.
Court’s reasoning on misrepresentation
Both strands of the misrepresentation claim failed under Singapore’s Misrepresentation Act 1967 because of a lack of evidence.
On the relationship representation, the court held there was no proof that the defendant promised exclusivity or that the claimant’s spending was conditional on it. His continued gifting even after suspecting infidelity, coupled with his own conduct, showed no reliance or inducement. Regarding the repayment representation, the court found insufficient evidence that defendant assured repayment from her accounts.
As for the handwritten document referring to return of deposits, the court observed that its authenticity was disputed, ultimately holding that it could not conclude that the document had been signed by the defendant.
Court’s reasoning on principles of equity
The high court also dismissed the claim in unjust enrichment. It emphasised that unjust enrichment requires an unjust factor and in this case, the claimant sought to rely on “failure of basis”. As the court explained, “The core underlying idea of failure of basis is simple: a benefit has been conferred on the joint understanding that the recipient’s right to retain it is conditional. If the condition is not fulfilled, the recipient must return the benefit.”
Therefore, the doctrine requires a joint understanding that the transfer was conditional. The court found no such shared basis: the claimant’s own conduct showed he intended the transfers as gifts. Since the alleged repayment assurances were not proven and the misrepresentation claims had already failed, there was no unjust factor. As a result, the court held that the sums were gifts, not loans and the unjust enrichment claim collapsed for lack of evidence of a joint understanding.
The court also rejected the claim that the defendant was subject to an institutional constructive trust. The doctrine of constructive trust is an equitable principle where the court imposes a trust by operation of law, even though no express trust by parties were created. Recognised categories include fraud, breach of fiduciary duty, common intention to share property or misuse of assets. In such cases, equity treats the holder as a trustee and the beneficiary gains proprietary rights.
The claimant alleged financial exploitation, but the court found the disputed sums were gifts, voluntarily given and not the product of any scheme of financial exploitation. With no evidence of fraud or other recognised grounds and no joint understanding of repayment, no constructive trust could arise.
The case underscores that courts will intervene to prevent injustice, but otherwise respect the autonomy of individuals in their personal relationships.
Alfreza Ahmed is an alum of ThePrint School of Journalism, currently interning with ThePrint.
(Edited by Nardeep Singh Dahiya)
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